Buoyed by boosts in their annual capital expenditure funding, two Ahold Delhaize USA (ADUSA) brands (divisions) – Giant/Martin’s and Stop & Shop – will open new store formats before the end of 2018.
Giant’s new entry, an urban small format store in Philadelphia – Giant Heirloom Market – will open in December while Stop & Shop debuted its new updated look earlier this month with 21 remodeled stores in the Hartford, CT market. Each brand will spend about $70 million in capital improvements in 2018.
To better understand the evolution of these moves, let’s review some history.
In December 2014, Ahold USA opened a new, perishables-driven small format store (3,700 square feet), Everything Fresh, on Walnut Street in Center City Philadelphia. The store was to serve as a laboratory for the big retailer’s recently formed small-format division.
Nine months later, that single store experiment expanded into bfresh, a 10,000 square foot unit that the company opened in another urban setting – Allston, MA.
Another bfresh store opened later in 2015 in tony Fairfield, CT and met with poor results closing within six months. When Ahold announced it was merging with Delhaize in June 2015, the focus on expanding its small-format division seemed to wane as the now even larger retail prioritized other initiatives.
In the past three years, new bfresh units have opened in Brighton, MA and Somerville, MA. The company also announced in mid-2016 that it had secured four locations in Philadelphia – Bainbridge Street, Chestnut Street (University City), South Street and North 2nd Street – and would build new small format units. Except those locations remained dormant as the small-format concept seemingly slipped further into oblivion.
In January 2018, Ahold Delhaize USA began its new decentralized structure giving the company’s brands autonomy over its stores. At Giant/Martin’s, that meant that newly installed president Nick Bertram would have responsibility for those unused sites (which Ahold Delhaize USA still controlled). The company said those stores were still being considered for small-format usage, but not under the bfresh banner.
On October 4, Giant announced that its location on Bainbridge Street would be converted to a new concept – Giant Heirloom Market – which is expected to open in December.
About 60 employees will be hired at the 9,500 square foot store which will include such unique features as a plant-based foods department, a produce chef and the option of mobile app driven scan & go (cashierless) checkout.
“As we celebrate our 95th anniversary, we can’t help thinking about the next chapter in Giant’s story,” said Bertram. “Philadelphia is a natural choice for us to debut our new Giant Heirloom Market format, as we’re able to draw upon our passion for food and our fondness for local purveyors, all while leveraging innovation to bring something special to our new Graduate Hospital neighbors.”
This will be Giant’s first Center City location, and as part of its ongoing commitment to fight hunger, the company donated $1 million to Philabundance, the Delaware Valley’s largest hunger relief organization.
“Our new Giant Heirloom Market is as unique and special as the neighborhood it serves, the direct result of our close collaboration with the local community it will soon be serving,” said Bertram. “From featuring products made locally to being staffed by people who call the neighborhood home, Giant Heirloom Market is a true reflection of the surrounding community, and we can’t wait to see our shared vision come to life in just a few short months.”
Giant noted that it listened locally, it searched nationally and globally for solutions, even going to Amsterdam ‐ a city known for its innovative, small grocery stores ‐ to find a format that would satisfy the community. Back home, Giant scoured Philadelphia for local purveyors who could help them deliver on the promise of a “neighborhood grocery store built by its neighbors.”
Asked whether Giant plans on opening its other three Philadelphia locations, a company spokesman said that decision will likely be based on the results of the Bainbridge St. store.
At Stop & Shop, the decision to spend significant capital on improving its supermarkets has been long overdue as new and existing competitors have captured share from the New England market leader for nearly a decade.
Following release of Ahold Delhaize’s second quarter earnings in August, new chief executive Frans Muller acknowledged that Stop & Shop sales were “challenged.” Muller vowed that his company would invest in upgrading stores at its largest and most profitable U.S. brand and would focus on “fresh meals, ready-made meals, ready-to-cook, ready-to-eat meal kits, different types of packaging sizes, healthier food. That’s all very much geared toward fresh formats across all the categories.”
The first phase of that upgrade – designed to “improve Stop & Shop’s in-store experience” – was unveiled earlier this month in 21 stores in one of the chain’s best markets – Hartford.
The results of the pilot program will be digested and then utilized to plan a company-wide upgrades across Stop & Shop’s more than 400 stores in New England and New York over the next several years. The new format also includes lower prices on thousands of items that customers buy most frequently, while also carrying a bigger assortment of affordable store-brand items, including products from Nature’s Promise.
Among the new features offered at the remodeled stores are:
- Focus on local, fresh and quality. Stores will feature more space dedicated to fresh produce and more locally grown and produced items like apples from Rogers Orchards in Southington, beer from Two Roads, plus coffee beans roasted in Hartford;
- Smoker – customers can choose from meats like brisket, pulled pork and baby back ribs slow cooked up to 14 hours over solid hickory wood.
- New in-store experiences – customers can create their own olive oil and vinegar blends like fig-infused balsamic at do-it-yourself machines. They can also fill up growlers at a kombucha fountain or find out what food pairs best with a hoppy IPA at an informational craft beer kiosk.
- Community tables – in-store cafes will feature community tables made from reclaimed wood, so neighbors can gather together with family-style seating. Digital community boards will also share local fundraisers and other events around town.
- Poke bowl and taqueria stations – new stations will make it easy to grab fresh, healthy meals with global flavors to-go.
- Curbside pickup – customers can pull up beneath solar-powered canopies to pick-up their online Peapod orders, which will soon be assembled by a miniature robotic warehouse thanks to a new partnership with Takeoff Technologies.
- Frictionless checkout – customers can save time when shopping in-store by using the “Scan It” mobile app, which provides a frictionless checkout experience. No waiting in line required.
“We recognize that our customer is changing, and we’re evolving our entire shopping experience to better serve them,” noted Stop & Shop President Mark McGowan. “They’re focused on getting back to their lives, juggling many responsibilities, and we want to make grocery shopping even easier and faster for them. Hartford is the first step in our journey towards repositioning our brand for future success and in helping our communities enjoy better food and better lives.”
Not all stores will share the same upgrades, but there will be some features that will be available in all 21 stores. Stop & Shop’s new look includes a modernized store format and a new logo, which is a nod to the brand’s past and its legacy of breaking new ground in convenience. The brand’s updated format reflects a customer-centric approach and a commitment to reshape its shopping experience around the customer and their evolving needs, the company noted.
Stop & Shop, which opened its first greater Hartford store in 1940, currently employs more than 3,000 people in the metropolitan area and anticipates that the renovated stores will boost headcount by 7 percent.